#junk fees – Federal Financial Analytics

18 09, 2023

DAILY091823

Eliza Allen2023-09-18T16:46:46-04:00September 18th, 2023|2- Daily Briefing|

Dems Slam Fed Climate Scenarios

Sens. Markey (D-MA), Warren (D-MA), Sanders (I-VT) and eight additional Democratic Senators and House Members sent a letter to Chair Powell today demanding that the Fed ensures that the financial institutions it oversees properly address the threat of climate change. Claiming that the Fed’s climate pilot scenarios are not sufficiently rigorous, the letter demands that the Fed require banks to submit and execute plans to align their activities with climate targets, such as reducing financed emissions.

Top Treasury Official Sounds Big-Tech Payments Alarm

Treasury Assistant Secretary for Financial Institutions Graham Steele Friday warned that Big-Tech firms’ entry into financial services could result in increased market concentration and predatory pricing, highlighting their ability to leverage existing commercial relationships as well as network effects. Mr. Steele also named consumer-data rights and junk fees as top priorities, praising the CFPB’s actions on personal data (see FSM Report DATA3) and credit-card late fees (see FSM Report CREDITCARD36).

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26 07, 2023

DAILY072623

Eliza Allen2023-07-26T16:37:20-04:00July 26th, 2023|2- Daily Briefing|

Senate Democrats Stand Firm On “Junk Fee” Campaign

Today’s lightly-attended Senate Banking Financial Institutions Subcommittee hearing on banking and consumer fees showcased broad Democratic alignment with the Administration’s “junk fees” campaign and persistent Republican aversion to this effort as well as to the CFPB.

CFPB Flags UDAAP, Other Problematic Practices for Enforcement

The CFPB’s latest supervisory report not only details recent actions and priorities, but also expressly stipulates that certain activities identified in the course of supervision that have yet to be addressed by formal agency action are UDAAP.

SEC Targets AI Advice

Acting as anticipated following Gary Gensler’s fiery talk last week about AI risk, the SEC today voted 3-2 to propose new rules curtailing what it believes to be broker dealer and investment-adviser conflicts of interest due to predictive analytics.

Crypto-Jurisdiction Bill to Advance; Stablecoin Measure Likely to do so Tomorrow

Chairman McHenry (R-NC) and Ranking Member Waters (D-CA) announced at today’s HFSC markup that bipartisan negotiations on the committee’s stablecoin bill continue and despite the absence of any breakthrough.

DOJ Officials Seeks Merger Answers

In remarks today, Policy Director David Lawrence of DOJ’s Antitrust Division went beyond new, draft DOJ/FTC merger guidelines (see FSM Report MERGER12) to lay out questions on which the agencies particularly seek answers.

Powell Stresses Bank Discount Window Readiness

FRB Chairman Powell’s press conference today focused almost entirely on monetary policy, but the chair agreed that the discount window performed badly during the recent crisis and that banks need to …

19 07, 2023

DAILY071923

Eliza Allen2023-07-19T16:57:05-04:00July 19th, 2023|2- Daily Briefing|

FTC/DOJ Propose Sweeping M&A Rewrite

Following an extensive inquiry into a new U.S. merger construct, the Department of Justice and Federal Trade Commission today released a draft formal policy statement that would codify issues previously raised in areas such as a transaction’s implications for workers.

White House Leaves Bank “Junk Fee” Attack As Is

Acting on President Biden’s competition executive order (see Client Report MERGER6), the White House today announced a slate of actions aimed at lowering consumer costs and promoting competition.

Bipartisan Senators Introduce New DeFi-AML/Sanctions Framework

Senator Reed (D-RI) yesterday introduced legislation along with Sens. Warner (D-VA), Rounds (R-SD), and Romney (R-UT) targeting DeFi-related money laundering and sanctions evasion.

Dems Reintroduce Bill Requiring Instant Consumer Deposit Access

Sens. Van Hollen (D-MD) and Warren (D-MA) and Reps. Pressley (D-MA) and Lynch (D-MA) have reintroduced the Payments Modernization Act, which requires financial institutions to recognize deposited funds in real-time and clarifies the moot point of whether the Fed has existing authority to build a real-time payments system.

Daily071923.pdf…

7 07, 2023

DAILY070723

Eliza Allen2023-07-07T16:47:33-04:00July 7th, 2023|2- Daily Briefing|

House Judiciary Joins GOP Asset-Manager ESG Attack

Continuing the GOP campaign against ESG, House Judiciary Chairman Jordan (R-OH) and Reps. Massie (R-KY) and Bishop (R-NC) sent letters late yesterday to the leadership of BlackRock, Vanguard, State Street Global Advisers, the Glasgow Financial Alliance for Net Zero, and the Net Zero Asset Managers initiative, claiming that what they call “collusive agreements” violate antitrust law.

FRB-KC: Farm Credit System Mergers May Influence Ag-Bank Portfolio Strategy

New research from Federal Reserve Bank of Kansas City staff concludes that, while Farm Credit System mergers over the past twenty years had relatively minor effects on agricultural-bank profitability and efficiency, they may have altered bank portfolio decisions with broader implications both for banks and the communities they serve.

CFPB, Treasury, HHS Launch Interagency Inquiry Into Medical-Payment Products

As part of the White House initiative to address medical-sector “junk fees” and consumer protection, the CFPB today was joined by HHS and Treasury in issuing an RFI on high-cost specialty financial products it says harm medical patients by driving up debt.

FHFA Joins Repeat-Offender Crackdown

Acting on the “repeat-offender” crackdown initiated by the CFPB and recently picked up by the OCC, FHFA today issued a proposed rule that would revise its Suspended Counterparty Program (SCP) regulation to authorize FHFA to immediately suspend business between the GSEs and counterparties who are found to have committed civil or criminal misconduct in connection with real property management or ownership.

Daily070723.pdf…

28 06, 2023

DAILY062823

Eliza Allen2023-06-28T17:21:14-04:00June 28th, 2023|2- Daily Briefing|

Biden Predicts End to Overdrafts

In a speech today detailing “Bidenomics”, President Biden continued his administration’s campaign against “junk fees,” specifically targeting overdrafts.

Fed Branch Approval Faced Unusual Bowman Protest

With a cryptic statement, FRB Gov. Bowman has taken the unusual step of protesting a branch application which she and all other governors approved. The issue appears to be the fact that two commenters objected to the branch application on grounds that the bank (Vantage in Texas) discriminates against African American borrowers. The Fed’s formal approval notes only these comments and otherwise approves of the bank’s fair-lending record, also noting its satisfactory CRA rating and the fact that the bank is principally a commercial lender.

Fed Finds Big Banks Resilient, Still Wants More Rules

The Fed’s stress-test release today attempts to meld both the Board’s finding that banks are not only resilient, but also “well-positioned” for a severe recession with Vice Chairman Barr’s plans to rewrite an array of new rules (see Client Report FEDERALRESERVE72) that stress tests are only one measure of strength the “resilient” evidence itself.

Daily062823.pdf…

14 06, 2023

CONSUMER51

Eliza Allen2023-06-14T16:55:35-04:00June 14th, 2023|5- Client Report|

Chopra Holds His Own Under GOP SVB, Consumer-Protection Attack

With Rep. Andy Barr (R-KY) leading the attack with an accusation of CFPB “McCarthyism,” today’s HFSC hearing with Director Chopra tracked much in yesterday’s Senate Banking session. As before, Republicans strongly attacked the credit-card late-fee proposal (see FSM Report CREDITCARD36) and new small-business reporting requirements. However, the lengthy session also allowed Members on both sides of the aisle to probe issues to which Senate Banking failed to turn. One of these was the FDIC’s decision to establish bridge banks for SVB and Signature and to sell FRC to JPM. Mr. Chopra vigorously denied any role of what some have called progressive ideology in opposing bids for SVB, noting also systemic concerns at that time partly due to fears about Credit Suisse. The agency’s controversial data-rights proposal will be out in October, with Director Chopra saying also that the proposal covers nonbanks by virtue of the data to be covered. Provider cyber-security will also be addressed. This report covers additional high-impact issues at the hearing including AI, UDAAP, and systemic designation.

CONSUMER51.pdf…

13 06, 2023

DAILY061323

Eliza Allen2023-06-13T17:11:07-04:00June 13th, 2023|2- Daily Briefing|

Prime Brokers Face New Liquidity-Risk Standards

FINRA today released long-awaited proposals to ensure greater prime-broker liquidity, with prime brokers governed by the largest BHCs presumed to have sufficient liquidity based on Fed supervision of relevant enhanced liquidity standards.

Treasury Presses Private RTP

In remarks today, Treasury Assistant Secretary Graham Steele made it clear that Treasury wants to see private real-time payments continue in concert with FedNow to ensure resilience, noting also that instant payments pose risks that require new tools such as advanced cryptographic methods and controls such as transaction limits.

Chopra Stands Ground; Vance Considers Banking-Agency Overhaul

Today’s Senate Banking Committee hearing with CFPB Director Chopra showcased the usual partisan divide over the Bureau’s mission, with Democrats denouncing the 5^th Circuit’s decision and Republicans taking issue with the Bureau’s franchise and activities as well as its credit-card late fee proposal (see FSM Report CREDITCARD36) and small business reporting rule.

Democrats Remain Cautious on Stablecoin Bill, Opposed to Crypto Jurisdiction Rewrite

As anticipated, the full HFSC hearing today on digital assets focused on draft legislation concerning payment stablecoins and digital asset market structure.

Daily061323.pdf…

9 06, 2023

Al061223

Eliza Allen2023-06-09T16:43:47-04:00June 9th, 2023|3- This Week|

A Day In The Gauntlet

On Tuesday and Wednesday, CFPB Director Chopra will come before Senate Banking and HFSC for the increasingly-ritualistic semi-annual oversight hearings. At them, Democrats praise the Bureau and press for more of the same, Republicans decry what’s been done to date and how the agency is allowed to do it, and Mr. Chopra generally says what he thinks and does what he likes.

Al061223.pdf…

18 04, 2023

DAILY041823

Eliza Allen2023-04-18T17:03:30-04:00April 18th, 2023|2- Daily Briefing|

FRB-NY Finds NBFIs a Source of Systemic Risk Over the Centuries

Reflecting renewed interest in “narrow banks,” the Federal Reserve Bank of New York blog posted evidence of systemic risk from nonbanks in the absence of any banks at all.

Stablecoin Compromise Faces Steep Challenges

As noted yesterday, HFSC’s Digital Asset Subcommittee is set for a Wednesday hearing clearly intended to lay the groundwork for near-term action on Chairman McHenry’s (R-NC) longstanding goal of enacting stablecoin legislation.

Despite Failures, DIF Restoration Ahead Of Schedule

At the FDIC Board’s meeting today, FDIC staff said that – while the timing for restoring the DIF to its 1.35% statutory minimum remains uncertain – the DIF could reach its statutory minimum ahead of time and by 2024.

Bowman Remains Staunch CBDC Skeptic

Reiterating that any U.S. CBDC requires Congressional approval, Gov. Bowman today also reiterated her longstanding skepticism to any such instrument.

CFPB Plans Timing Study to Buttress Junk-Fee Regs

The Federal Register today includes a CFPB comment request on its “Junk Fees Timing Study,” which would be part of a series of online lab experiments testing differences in consumer choices across different information presentations.

Warren, Reed Demand OFR Use Subpoenas To Obtain Systemic Data

Sens. Warren (D-MA) and Reed (D-RI) today urged OFR Acting Director Martin to fill data gaps around financial stability risks posed by climate change, cryptocurrencies, and repo markets.

Daily041823.pdf…

17 04, 2023

DAILY041723

Eliza Allen2023-04-17T16:50:24-04:00April 17th, 2023|2- Daily Briefing|

HFSC Prepares for Gensler Grilling

As expected, the staff memo ahead of HFSC’s hearing tomorrow with SEC Chairman Gensler reiterates much that has previously played out in highly-critical correspondence and subpoena threats.

Senate GOP Again Slam CFPB

Ranking Member Scott (R-SC) along with eight other Senate Banking Republicans sent a letter to CFPB Director Chopra last Thursday again taking serious issue with the CFPB’s “junk fee” initiative (see FSM Report CONSUMER38), calling many targeted fees “legal” and “reasonable.”

FRB-Philadelphia Study: U.S. Banking Not Concentrated

A new paper from the Federal Reserve Bank of Philadelphia finds that data suggesting undue banking-sector concentration may be misleading.

Fed Study: EU Banks Dress Up As Supervisors Approach

In a most timely study, the FRB has released a staff paper assessing how bank supervision alters short- and medium-term bank risk-taking.

Daily041723.pdf…